ENTEGRIS, INC. BILLERICA, Mass., April 27, 2017 /PRNewswire/ -- Entegris, Inc. (NasdaqGS: ENTG), a leader in specialty chemicals and advanced materials solutions for the microelectronics industry, today reported its financial results for the Company's first quarter ended April 1, 2017.
First-quarter sales were $317.4 million, an increase of 18.9% from the same quarter last year and a 2.9% increase sequentially. First-quarter net income was $32.5 million, or $0.23 per diluted share, which included amortization of intangible assets of $10.9 million. Non-GAAP net income was $40.8 million, or $0.28 per diluted share.
Bertrand Loy, president and chief executive officer, said: "I am very pleased to report another extremely successful quarter, which reflects the growing importance of our value proposition and the quality of execution by our teams around the world. First-quarter sales reached an all-time high driven by strength across all businesses and record demand for microfiltration and advanced deposition products. In large part, the introduction of new materials is making possible the next level of semiconductor device performance, and we believe that our expertise in advanced materials combined with our broad array of purification and fluid handling solutions will be key enablers of our industry's innovations."
Mr. Loy added: "We generated record quarterly adjusted EBITDA of $75.8 million, or 23.9% of revenue. In addition to pursuing organic growth prospects for the company, we continued to execute our capital allocation strategy by paying down $25 million of debt in the first quarter and by completing the acquisition of a complementary and accretive liquid filtration product line from W. L. Gore & Associates, Inc."
Quarterly Financial Results Summary
(in thousands, except per share data)
GAAP Results Q1-2017 Q1-2016 Q4-2016
------------ ------- ------- -------
Net sales $317,377 $267,024 $308,502
--------- -------- -------- --------
Operating income $50,920 $29,559 $44,905
---------------- ------- ------- -------
Operating margin 16.0% 11.1% 14.6%
--- ---
Net income $32,514 $16,212 $26,098
---------- ------- ------- -------
Diluted earnings per share
(EPS) $0.23 $0.11 $0.18
-------------------------- ----- ----- -----
Non-GAAP Results
Non-GAAP adjusted
operating income $61,865 $40,848 $55,843
----------------- ------- ------- -------
Adjusted operating margin 19.5 % 15.3% 18.1%
------------------------- ----- ---- ----
Non-GAAP net income $40,754 $23,617 $34,294
------------------- ------- ------- -------
Non-GAAP EPS $0.28 $0.17 $0.24
------------ ----- ----- -----
Second-Quarter Outlook
For the second quarter ending July 1, 2017, the Company expects sales of $315 million to $330 million, net income of $32 million to $37 million, and net income per diluted share between $0.22 and $0.26. On a non-GAAP basis, EPS is expected to range from $0.27 to $0.31 per diluted share, which reflects net income on a non-GAAP basis in the range of $39 million to $44 million, which is adjusted for expected amortization expense of approximately $11 million or $0.05 per share.
Segment Results
As of December 31, 2016, the Company changed its financial segment reporting to the following segments:
Specialty Chemicals and Engineered Materials (SCEM): SCEM provides high-performance and high-purity process chemistries, gases, and materials and safe and efficient delivery systems to support semiconductor and other advanced manufacturing processes.
Microcontamination Control (MC): MC solutions purify critical liquid chemistries and gases used in semiconductor manufacturing processes and other high-technology industries.
Advanced Materials Handling (AMH): AMH develops solutions to monitor, protect, transport, and deliver critical liquid chemistries and substrates for a broad set of applications in the semiconductor industry and other high-technology industries.
First-Quarter Results Conference Call Details
Entegris will hold a conference call to discuss its results for the first quarter on Thursday, April 27, 2017, at 9:30 a.m. Eastern Time. Participants should dial 1-888-778-9067 or 1-913-981-5587, referencing confirmation code 5731098. Participants are asked to dial in 5 to 10 minutes prior to the start of the call. To access a telephonic replay of the call, please Click Here. The replay will be available starting at 12:30 p.m. ET on Thursday, April 27 until Saturday, June 10. A live and on-demand webcast of the call can also be accessed from the investor relations section of Entegris' website at www.entegris.com.
Management's slide presentation concerning the results for the first quarter, which may be referred to during the call, will be posted on the investor relations section of www.entegris.com Thursday morning before the call.
ABOUT ENTEGRIS
Entegris is a leader in specialty chemicals and advanced materials solutions for the microelectronics industry and other high-tech industries. Entegris is ISO 9001 certified and has manufacturing, customer service and/or research facilities in the United States, China, France, Germany, Israel, Japan, Malaysia, Singapore, South Korea and Taiwan. Additional information can be found at www.entegris.com.
Non-GAAP Information
The Company's condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States (GAAP). Adjusted EBITDA, Adjusted Gross Profit, Adjusted Segment Profit, and Adjusted Operating Income together with related measures thereof, and non-GAAP EPS, are considered "Non-GAAP financial measures" under the rules and regulations of the Securities and Exchange Commission. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. The Company uses these non-GAAP financial measures for financial and operational decision-making, as a means to evaluate period-to-period comparisons, as well as comparisons to our competitors' operating results. Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain items that may not be indicative of our recurring business operating results, such as amortization, depreciation and discrete cash charges that are infrequent in nature. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing and understanding our results and performance and when planning, forecasting, and analyzing future periods. We believe these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) they are used by our institutional investors and the analyst community to help them analyze our business. The reconciliations of GAAP Net Income to Adjusted Operating Income and Adjusted EBITDA, GAAP Gross Profit to Adjusted Gross Profit, GAAP Segment Profit to Adjusted Operating Income, and GAAP to Non-GAAP Earnings per Share are included elsewhere in this release.
Forward-Looking Statements
Certain information contained in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current management expectations only as of the date of this press release, and involve substantial risks and uncertainties that could cause actual results to differ materially from the results expressed in, or implied by, these forward-looking statements. Statements that include such words as "anticipate," "believe," "estimate," "expect," "forecast," "may," "will," "should" or the negative thereof and similar expressions as they relate to Entegris or our management are intended to identify such forward-looking statements. These statements, including those relating to market trends and financial projections, are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. These risks include, but are not limited to, fluctuations in the market price of Entegris' stock, Entegris' future operating results, other acquisition and investment opportunities available to Entegris, general business and market conditions and other factors. Additional information concerning these and other risk factors may be found in previous financial press releases issued by Entegris and Entegris' periodic public filings with the Securities and Exchange Commission, including discussions appearing under the headings "Risks Relating to our Business and Industry," "Risks Relating to Our Indebtedness," "Manufacturing Risks," "International Risks," and "Risks Related to Owning Our Common Stock" in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, filed with the U.S Securities and Exchange Commission on February 17, 2017, as well as other matters and important factors disclosed previously and from time to time in the filings of Entegris with the U.S. Securities and Exchange Commission. Except as required under the federal securities laws and the rules and regulations of the Securities and Exchange Commission, we undertake no obligation to update publicly any forward-looking statements contained herein.
Entegris, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three months ended
April 1, April 2, December 31,
2017 2016 2016
--------- --------- ------------
Net sales $317,377 $267,024 $308,502
Cost of sales 177,781 152,318 176,702
Gross profit 139,596 114,706 131,800
Selling, general and
administrative
expenses 50,492 47,956 48,734
Engineering, research
and development
expenses 27,239 25,902 27,223
Amortization of
intangible assets 10,945 11,289 10,938
Operating income 50,920 29,559 44,905
Interest expense, net 8,393 9,149 8,983
Other expense
(income), net 902 (675) 1,303
--- ---- -----
Income before income tax
expense 41,625 21,085 34,619
Income tax expense 9,111 4,873 8,521
Net income $32,514 $16,212 $26,098
======= ======= =======
Basic net income per
common share: $0.23 $0.12 $0.18
Diluted net income
per common share: $0.23 $0.11 $0.18
Weighted average shares
outstanding:
Basic 141,501 140,780 141,315
Diluted 143,315 141,371 142,631
Entegris, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
April 1, December 31,
2017 2016
--------- ------------
ASSETS
Cash and cash equivalents $391,159 $406,389
Accounts receivable, net 176,032 165,675
Inventories 188,343 183,529
Deferred tax charges and
refundable income taxes 16,729 20,140
Other current assets 19,489 24,398
------ ------
Total current assets 791,752 800,131
Property, plant and equipment, net 330,926 321,562
Goodwill 349,120 345,269
Intangible assets 208,591 217,548
Deferred tax assets 8,418 8,022
Other assets 7,287 7,000
Total assets $1,696,094 $1,699,532
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Long-term debt, current maturities $100,000 $100,000
Accounts payable 54,516 61,617
Accrued liabilities 66,382 83,530
Income tax payable 15,341 16,424
------ ------
Total current liabilities 236,239 261,571
Long-term debt, excluding current
maturities 460,315 484,677
Other liabilities 54,479 54,066
Shareholders' equity 945,061 899,218
------- -------
Total liabilities and
shareholders' equity $1,696,094 $1,699,532
========== ==========
Entegris, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three months ended
April 1, 2017 April 2, 2016
------------- -------------
Operating activities:
Net income $32,514 $16,212
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 13,977 13,700
Amortization 10,945 11,289
Stock-based compensation expense 3,870 2,861
Provision for deferred income taxes 3,422 (211)
Other 3,633 4,796
Changes in operating assets and liabilities:
Trade accounts and notes receivable (7,546) (6,799)
Inventories (5,415) (12,998)
Accounts payable and accrued liabilities (23,490) (9,510)
Income taxes payable and refundable income taxes (1,252) (726)
Other 2,774 (1,275)
Net cash provided by operating activities 33,432 17,339
----------------------------------------- ------ ------
Investing activities:
Acquisition of property and equipment (22,190) (17,819)
Other 186 (2,495)
----- --- ------
Net cash used in investing activities (22,004) (20,314)
------------------------------------- ------- -------
Financing activities:
Payments on long-term debt (25,000) -
Issuance of common stock 1,041 -
Taxes paid related to net share settlement of equity awards (4,575) (2,067)
Other (4,270) (3,524)
Net cash used in financing activities (32,804) (5,591)
Effect of exchange rate changes on cash 6,146 3,144
--------------------------------------- ----- -----
Decrease in cash and cash equivalents (15,230) (5,422)
Cash and cash equivalents at beginning of period 406,389 349,825
------------------------------------------------ ------- -------
Cash and cash equivalents at end of period $391,159 $344,403
========================================== ======== ========
Entegris, Inc. and Subsidiaries
Segment Information
(In thousands)
(Unaudited)
Three months ended
Net sales April 1, April 2, December 31,
2017 2016 2016
--------- --------- --------- ------------
Specialty Chemicals and
Engineered Materials $114,435 $101,107 $110,945
Microcontamination
Control 100,055 77,619 98,717
Advanced Materials
Handling 102,887 88,298 98,840
------- ------ ------
Total net sales $317,377 $267,024 $308,502
======== ======== ========
Three months ended
Segment profit April 1, April 2, December 31,
2017 2016 2016
-------------- --------- --------- ------------
Specialty Chemicals and
Engineered Materials $28,140 $22,416 $25,919
Microcontamination Control 35,581 18,140 31,719
Advanced Materials Handling 18,276 18,911 16,644
------ ------ ------
Total segment profit 81,997 59,467 74,282
Amortization of intangibles 10,945 11,289 10,938
Unallocated expenses 20,132 18,619 18,439
Total operating income $50,920 $29,559 $44,905
======= ======= =======
Entegris, Inc. and Subsidiaries
Reconciliation of GAAP Net Income to Adjusted Operating Income and Adjusted EBITDA
(In thousands)
(Unaudited)
Three months ended
April 1, 2017 April 2, 2016 December 31,
2016
------------- ------------- ------------
Net sales $317,377 $267,024 $308,502
Net income $32,514 $16,212 $26,098
Adjustments to net income:
Income tax expense 9,111 4,873 8,521
Interest expense,
net 8,393 9,149 8,983
Other expense
(income), net 902 (675) 1,303
--- ---- -----
GAAP -Operating
income 50,920 29,559 44,905
Amortization of
intangible assets 10,945 11,289 10,938
------ ------ ------
Adjusted operating
income 61,865 40,848 55,843
Depreciation 13,977 13,700 14,303
------ ------ ------
Adjusted EBITDA $75,842 $54,548 $70,146
======= ======= =======
Adjusted operating
margin 19.5% 15.3% 18.1%
Adjusted EBITDA -
as a % of net
sales 23.9% 20.4% 22.7%
----------------- ---- ---- ----
Entegris, Inc. and Subsidiaries
Reconciliation of GAAP Net Income to Non-GAAP Earnings per Share
(In thousands, except per share data)
(Unaudited)
Three months ended
April 1, 2017 April 2, 2016 December 31,
2016
------------- ------------- ------------
GAAP net income $32,514 $16,212 $26,098
Adjustments to net income:
Gain on sale of
equity investment - (118) -
Amortization of
intangible assets 10,945 11,289 10,938
Tax effect of
adjustments to
net income and
discrete items (2,705) (3,766) (2,742)
------ ------ ------
Non-GAAP net
income $40,754 $23,617 $34,294
======= ======= =======
Diluted earnings
per common share $0.23 $0.11 $0.18
Effect of
adjustments to
net income $0.06 $0.05 $0.06
Diluted non-GAAP
earnings per
common share $0.28 $0.17 $0.24
---------------- ----- ----- -----
Contact:
Steven Cantor
VP of Corporate Relations
T + 978 436 6500
irelations@entegris.com
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SOURCE Entegris, Inc.
